Rising Regional Inequality In China Is A Myth Spawned Of Bad Data

A commonly cited source of tension in China is rising inequality
between the few concentrated centers of manufacturing and the
rest of the country. The usual data used to make that point
is GDP per capita within regions.

A
new post at VoxEu by John Gibson and Chao Li explains that
much of that perceived trend is actually down to quirks in
Chinese population data.

Chinese population is counted in two ways, by a household
registration system known as hukou, and an actual resident count
previously conducted every five years. Until recently, the hukou
was used to calculate regional GDP per capita.

The number of migrants not included in the hukou count was
absolutely enormous. The examples Gibson and Lee provide are
Guangdong province, where population was understated by 11
million and GDP per capita was overstated by 15 percent. Even
more extreme is the city of Shenzen, where residents was
understated by 6 million by official population data, and GDP per
capita overstated by nearly 600 percent.

Here's
the author's map of how GDP was over and understated in 2005,
as there is data from both an interdecadal resident count and the
hukou during a period of migration: